If Japan exports more than it imports, then
A)the supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus.
B)one can infer that the yen would be likely to appreciate against other currencies.
C)a and b
D)None of the above

Question

Quizplus · Accepted Answer

When Japan exports more than it imports, there is a higher demand for yen to pay for Japanese goods, leading to an appreciation of the yen against other currencies.

If Japan Exports More Than It Imports, Then